The U.S. Senate is set to vote this week on a $1.5 trillion tax cut package. Though different in many respects from the House-passed measure, this is an equally disastrous bill that gives the lion’s share of benefits to the wealthiest Americans, balloons the deficit — and wages economic war on states like New York.
Senate Republicans insist that the overhaul will pay for itself by goosing growth. That is, how shall we put it, a lie.
Conservatives, claiming that typical attempts to calculate the impact of tax cuts fail to take into account the economic growth they cause, demand what’s known as “dynamic scoring.” But even under one such model — the Penn Wharton Budget Model at the University of Pennsylvania — the Senate bill would grow the economy by 0.3% to 0.8%, while causing a drop in revenues of $1.3 trillion to $1.5 trillion . Oops.
Some of that is because the legislation is built on a bait-and-switch. Republicans insist that they’re delivering most Americans a tax cut — but by design, more than 50% of taxpayers are set to see a tax hike in 10 years as individual tax cuts expire while corporate taxes remain permanent.
And, to add insult to injury, the Senate is baking in a revocation of the Affordable Care Act’s individual mandate, which would cause 13 million Americans to lose their health insurance — an action that will also cause premiums to soar, likely undermining the impact of whatever meager tax cut those in the middle class might receive.
At the state level, the fiscal havoc will be even harsher, as the Senate bill takes a meat cleaver to New Yorkers’ ability to deduct state and local tax bills on their federal returns. That will cost families from Brooklyn to the Bronx to Buffalo many billions.
According to a new analysis from the Tax Policy Center, the Senate bill gives more than 60% of its benefits to the top 1% of taxpayers. Those in the top 0.1% of incomes are set to get 40% of all cuts.
By any sane analysis, this is an unfair, unconscionable monstrosity. And it has a real chance of passing. Be very, very afraid.